Reporting of Export Value and Taxes in Wrong Table of GSTR 3B being Technical in nature cannot result in denial of Export Refund

[Rachit Agarwal]

M/S. ABI TECHNOLOGIES VERSUS THE ASSISTANT COMMISSIONER OF CUSTOMS, TUTICORIN. [2022 (5) TMI 1136 - MADRAS HIGH COURT]

Facts of the Case

Petitioner submits that the outward supplies ie., exports would have qualified as a zero rated supply and therefore, the petitioner should have filled the details in Form GSTR-3B in column 3.1 (b). Instead, the petitioner by mistake has given the details of the export as outward taxable supply (other than zero rated, nil rated and exempted).

Respondent Pleadings

Refund would be granted subject to the petitioner giving the correct informations in the returns, namely GSTR-1 and GSTR-3B. It is only the information, which match and invoices, which were uploaded, the refund would be sanctioned. In this connection, the learned Senior Standing Counsel has relied to Rule 96 of the CGST Rules, 2017

It was the responsibility of the petitioner to file a valid GSTR-1 and GSTR-3B returns

Upon filing of the valid returns, the GSTN portal will transmit the details of export invoices to the system designated by the customs.

Since the respondent is not in a position to process the petitioner's refund claim as the details itself have not been received from GSTN portal to the designated system of the customs, the question of granting refund to the petitioner does not arise

Refund of IGST can be processed by the designated system of customs or by the proper officer of the customs only on receiving the details from the GSTN portal and since no data was transmitted from the GST common portal, the question of sanctioning refund under Rule 96 of CGST Rules, 2017 was neither permissible nor practically possible

Hon’ble Court Observations and Order

The export incentives have been given to encourage exports, so that there is inward remittance of foreign currency.

The procedure prescribed under the aforesaid Rules is not intended to defeat such legitimate export incentives, if indeed on facts there is export on payment of integrated tax under the provisions of IGST Act, 2017 r/w CGST Act, 2017.

The procedures under Rule 96 of CGST Rules, 2017 cannot be applied strictly to deny legitimate export incentives that are available to an exporters.

In my view, the procedures prescribed under the aforesaid Rules should not be applied strictly so as to defeat the legitimate export incentives, which an exporter otherwise would have been entitled to but for the technicality involved in the system.

If indeed there was an export and a valid debit of tax by the petitioner on the exports made to foreign buyers, the refund shall be granted.

The respondent shall consider, verify the same from the counterparts from the customs department and proceed to sanction the refund claim

It is made clear that procedural infraction shall not come in the legitimate way of grant of refund under the IGST Act, 2017 r/w CGST Act, 2017 and the Rules made thereunder.